GJ Estates has compiled a list of the most frequently asked questions concerning buying property in Lanzarote. Not surprisingly, legal and financial issues are top of the list. The following information is merely a guideline and not a comprehensive guide to buying property in Lanzarote.
How much deposit is required to secure a property?
As a general rule, a 10% deposit is required, although this may vary, especially with new or off-plan developments.
How much do I need to allow on top of purchase price to cover stamp duty and legal costs?
You should allow 10% of the purchase price to cover your purchase costs. This includes 6.5% ITP Tax (Impuestos sobre Transmisiones Patrimonials) equivalent of Stamp Duty in the UK), Notarial Costs, Land registry and property registration fees, legal fees, (if required), various minor taxes and all paperwork costs.
We will be happy to discuss these in more detail with you.
Can I apply for a mortgage with a Spanish bank in Lanzarote?
Yes, Spanish banks will lend but they do offer far lower Loan to Values than UK banks. We will gladly go through with you exactly what is required by the banks if you need to raise finance.
Do I need a lawyer to purchase or sell a property in Lanzarote?
There is no obligation to use legal representation. For instance, in the UK it is required for both parties to use legal representation. In Lanzarote legal representation is optional. We can explain the process to you in further detail, so you can decide.
If I choose to have a lawyer, can I choose my own lawyer?
Of course, if you decide to use a lawyer, the choice of who represents you is your decision. If you are unsure of what lawyer to use, we can recommend an independent and reputable Spanish lawyer who speaks English and is based in Lanzarote.
How long does it take to complete?
Typically, it takes 6–8 weeks, but this timeframe can be shortened or lengthened to whatever suits both the buyer and seller as each completion will differ.
Do I need to personally be in Lanzarote to sign for completion?
No, you do not. You may grant GJ Estates or your lawyer power of attorney to sign on your behalf. The day of completion is very time consuming and be prepared to spend several hours in the Notary office. The Power of Attorney is particularly suitable for people who are unable to be in Lanzarote to complete. So that when you do travel to Lanzarote, the transaction has already completed and you can concentrate on enjoying your new property with a minimum of fuss.
How do I open a Spanish bank account?
We will help you open a bank account and introduce you to a friendly bank manager. You will need a photocopy of your passport and proof of address to open the account.
What is an Escritura?
This translates as title deed in English. It contains the essential details of the property, such as the legal owner, registered plot size and built area, and whether the property is urban or rural. When you purchase a property, make sure you always receive your original escritura, and keep it in a safe place!
What is a Nota Simple?
This is the land registry search that is performed on the title deed of the house you are interested in buying. It is also known as a certificate of non-encumbrance. When you decide on a property, it is necessary to request information on the property from the land registry, in order to verify that the person who says they own the property is indeed the true registered owner.
It also tells us whether they are the sole owner or the property is co-owned. If there are any mortgages on the property they will show up on the nota simple, as will any encumbrances or embargos. We can obtain the nota simple on your behalf and check that everything is in order
If I want to do some work on my property, do I need to apply for planning permission?
If you are simply renovating the interior, for example if you want to change your bathroom suite or kitchen, it is not necessary. However, if you wish to extend your property, raise a boundary wall, install a swimming pool or carry out any type of construction that changes, increases or reduces the physical dimensions of your house (and walls, garage, terrace etc.) you need to apply for planning permission. We can advise you on legal requirements and handle the necessary paperwork for you.
In all cases you should always find out before you begin any work.
What living costs do I have to pay if I own property in Lanzarote?
Water and electricity are metred, so you pay for what you use. You will pay annual rates or property tax (IBI – Impuesto sobre Bienes Inmuebles) and annual rubbish collection fee (Basura). Both of these are paid to your local town hall. If you live on a complex or estate with shared facilities and communal areas, you will probably pay a community fee.
We will tell you all the costs that apply to ownership of your chosen property before you make your decision to buy. If you have a Spanish mortgage your bank will require you to have house insurance, which is recommendable even if you don’t have a mortgage.
Do I need to make a Spanish will?
There is no obligation, but it is advisable to make a Spanish will because otherwise there are complications and probate may take up more time than otherwise necessary. We can discuss this in further detail with you if you are interested in making a will.